Zydus Wellness (531335) Q1 25/26 earnings summary

Executive summary

• Net sales grew 2.2% year-over-year to INR 8,577 million, with double-digit growth in non-seasonal brands offsetting seasonal headwinds from early monsoons and unseasonal rains.

• EBITDA was stable at INR 1,556 million, up 0.2% year-over-year, while PAT declined 13.4% due to non-cash items and higher employee and promotional expenses.

• Core brands like Sugar Free and Glucon-D maintained dominant market shares, and recent acquisitions outperformed expectations.

• International business contributed 85% of top 5 market revenues, with a target to reach 8–10% of total revenue in 4–5 years.

• Unaudited standalone and consolidated financial results for Q1 FY26 were approved by the Board on July 30, 2025.

Financial highlights

• Consolidated revenue from operations for Q1 FY26 was 8,609 million, up from 8,410 million in Q1 FY25.

• EBITDA stood at INR 1,556 million (18.1% of revenue), nearly flat year-over-year.

• PAT was INR 1,279 million, down from INR 1,477 million in Q1 FY25.

• Gross margin was 54.8%, down 73 bps year-over-year, though cumulative gross margin expanded 361 bps over two years.

• Advertisement and promotion expenses increased 6.6% year-over-year.

Outlook and guidance

• Margin recovery is expected as input inflation eases and product-by-product gross margin expansion continues.

• The company remains committed to a two-year journey of EBITDA margin enhancement, with operating leverage and cost discipline as key drivers.

• Focus on accelerating growth of core brands, portfolio diversification, and international expansion, especially in SAARC, MEA, and SEA regions.

• Open to bolt-on acquisitions to drive scale and fill portfolio gaps.

• Performance in the first and last quarters is not representative due to product seasonality.